Why Uber’s Bid For Platform Monopoly is Dangerous

This is a response to Susan Crawford’s recent piece“Getting Over Uber.”

My problem with Uber all along has been that it’s optimized for a really specific utility, but at the expense of others. It’s a bit like online universities, which offer courses isolated from the fabric of education or a learning community. That’s the nature of any digital business: you get what you program for, but lose everything else — and sometimes it doesn’t come back.

Remember what Clearchannel did to the FM dial? They bought it all up, and replaced local stations and deep music knowledge with long-distance, computer-generated play lists. It was all excused as free market capitalism; thanks to VC they had more money, so they were entitled to purchase the landscape. Eventually, the non-local Clearchannel FM stations proved they weren’t profitable enough to sustain the company’s valuation, so Clearchannel began selling them. But the institutional knowledge enjoyed by those original FM stations was gone.

Uber may be of great utility in the limited frame of providing low-cost rides for people with iPhones. But it does not serve any of the other functions that a local taxi service does. Meanwhile, its programmed not just to provide rides, but to take out competition. It is a platform monopoly in the making. This is because it cannot support it’s multi-billion-dollar valuation by being a ride broker.

Uber needs to create a platform monopoly so that it can leverage into other verticals, from logistics to self-driving cars. If anything, Uber’s drivers are the R&D for Uber’s driverless future. They are spending their labor and capital investments (cars) on their own future unemployment. And even that would be okay, if they were shareholders in Uber capable of participating in those future profits — but it’s not a worker-owned cooperative at all.

As every economist since Adam Smith and before has known, the factors of production are land, labor, and capital — and sometimes entrepreneurial effort. But the current digital economy rewards only capital, and acts as if acknowledging the contributions of land and labor were a communist, regulatory plot.

The people providing the labor and the communities providing the territory for Uber’s operations deserve an equal say in the way the company works, and revenues the company earns.

Douglas Rushkoff is the author of Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity, as well as a dozen other bestselling books on media, technology, and culture, including Present Shock, Program or Be Programmed, Media Virus, Life Inc and the novel Ecstasy Club. He is Professor of Media Theory and Digital Economics at CUNY/Queens. He wrote the graphic novels Aleister & Adolf, Testament, and A.D.D., and made the television documentaries Generation Like, Merchants of Cool, The Persuaders, and Digital Nation. He lives in New York, and lectures about media, society, and economics around the world.